Are your contracts a reflection of your business?

June 25, 2019 | Written By Elana Bertram

Are your contracts a reflection of your business?

You work hard on your marketing, branding, image, and reputation (yes, these are all different aspects of promoting your goods and services). Have you put as much effort into harmonizing your contracts with your brand?

It’s not only about making a professional first impression, but it’s also about respecting your clientele and meeting them where they are. Throwing a 7-page contract full of legalese for a $500 project can not only be intimidating to some clients, but they may sign without reading it, ignoring all the terms they committed to. If it comes to a dispute, you may not understand what you expected of each other, and have regrets. This can lead to high emotions and high costs. Likewise, if you’re dealing with a sophisticated, established business, coming to the table without having thought through all the possibilities could put you at a dramatic disadvantage.

What is a contract for? Contracts are to lay out the expectations of the parties. Who is paying whom? When? How much? What are they buying? What happens if the thing they bought isn’t to their liking, is late, or is incompatible with something else they bought elsewhere? These are easy assumptions to make, but important conversations to have. Whether you are a photographer working one wedding at a time or a contractor who knows they will need between 500 and 600 gallons of paint every week for years to come, your contracts need to reflect your expectations in a way your counterparty can understand.

Yes, your contracts are “binding,” in that you will be able to enforce any signed agreement in a court of law. Avoiding law suits is always a better resolution to disputes based in misunderstanding. If it’s very important to you that the client realize that canceling within 48 hours means no refund for any reason, don’t bury it at the end of the 14th paragraph. If, instead, a manufacturer delivering goods by or before a certain date is your drop-dead issue that will cause you to lose tens of thousands more dollars than the goods are worth, don’t be coy. Say what you need, clearly.

Part of the reason contracts can get very long is that, over time, as problems came up, courts in various states decided exactly what the contract SHOULD have said to avoid the problems. Lawyers then take that exact language and copy it into your contract. This is called “boilerplate,” and it is valuable. It all came from somewhere, and it’s all there for a reason: don’t just delete it! And absolutely using a contract from the internet (look at trade associations or borrow from other professionals like yourself, before writing your own) is better than no written agreement at all. But understand that when you download a “form” contract from the internet, it’s generic. Customizing it to suit your business practices and circumstances is what lawyers do for you. It can not only be a useful legal document to allow you to assert your rights in a court of law, but it can also be a tool to avoid lawsuits by presenting your expectations in a way your counterparties cannot argue with.

Consider the following: do you normally work with a large company that has a legal department or procurement department deal with agreements? Do you usually deal with individuals, or small “mom & pop” type customers? Have you worked with attorneys to develop your document, have you made changes yourself reactive to bad things that happened to you personally, or have you downloaded something that looks intimidating off the internet and hoped for the best? Do you make every client sign an agreement, or only feel like a certain dollar amount makes it “important enough”? There are no wrong answers here, but if you have questions about how to make sure your contracts match your business, consider reaching out to me. To view Elana Bertram full biography and contact info, click here.

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